Much like cash, they are suitable for everyday purchases, such as buying in-game items or paying for crypto services. Purchasing USDC won’t provide any investment returns for buyers because it was designed to be a stablecoin. However, the benefits of buying this cryptocurrency are more about how useful it is rather than how much money you can make from an increase in price. In a seemingly loosely regulated space, USDC has continued to distinguish itself from other stablecoin projects by forging ties with traditional financial institutions.
Why Does USDC Have Value?
Ethereum, its native blockchain, is often slow and beleaguered by bottlenecks. So Centre has forged partnerships with Algorand, Stellar and Solana, rival blockchains, to expand the market. The customer can also convert the USDC back into US Dollars, which will then be wired back into their bank account. Meanwhile, USDC’s value has stayed relatively stable over its life, although there may be some short-term volatility during extreme market periods, Manoppo says. If such payment ecosystems make ground, it’s a real threat to US Treasury liquidity, risking a key pillar of the greenback’s international position, Tran said. For this reason, Riyadh has gradually aligned itself with the de-dollarization movement, which seeks to lower the greenback’s dominance of world finance.
USD Coin (USDC) is a stablecoin pegged to the value of the U.S. dollar.
As the name suggests, fiat-collateralized currencies are backed by a sovereign currency, such as the U.S. dollar or the British pound. USD Coin is the currently the second-largest stablecoin, with a current market capitalization of $73 billion. USD Coin and Tether (USDT) together account for 80% of the capitalization of the global stablecoin market. The most popular wallets for cryptocurrency include both hot and cold wallets.
USDC to USD Chart
- USD Coin’s main advantage is that it enables people to buy and sell other cryptocurrencies without having to move fiat currency in and out of exchanges.
- One of its most important functions is that it is used as a decentralized store of value.
- Mining Bitcoins can be very profitable for miners, depending on the current hash rate and the price of Bitcoin.
- USD Coin maintains a fixed value of $1 per coin, and a U.S. dollar backs each USD Coin in a dedicated bank account.
- For every USDC token in circulation, Circle claims to hold an equivalent amount of US dollars in reserve bank accounts.
- USDC provides liquidity to crypto markets and is available as an asset on several major blockchain networks, such as Ethereum, Algorand (ALGO), Solana (SOL) and TRON (TRX), to name a few.
When facing significant market volatility, cryptocurrency traders often turn to USDC as a stable holding while waiting for asset prices to stabilise. This ability to mitigate risk significantly contributes to USDC’s value within the cryptocurrency market. USD Coin is also available to trade on a number of other popular cryptocurrency exchanges, including Binance, Bitfinex, Coinbase, Crypto.com, Kraken, and Uniswap.
- ✝ To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score.
- Unlike some stablecoins linked to the price of a single asset or basket of assets, USDC’s value is tied directly to the U.S. dollar.
- You can also use USDC in a variety of decentralized finance protocols.
- While most CBDCs are only in the research phase, USDC exists today and is widely used by millions of people around the world.
- USD Coin, often referred to by its cryptocurrency ticker symbol USDC, is a stablecoin created by Centre, an organization backed by major cryptocurrency exchange Coinbase and Fintech company Circle.
- Since USDC operates on the blockchain, it benefits from the features of blockchain technology, such as the permissionless p2p transfer of assets.
Convert Canadian Dollar to US Dollar
Integrate responsibly managed stablecoins that you and your customers can trust. U.S. lawmakers have been working on a regulatory framework for stablecoins and their issuers that could affect how they’re used. It’s worth mentioning that USD Coin follows current regulations and would likely have fewer issues with any new rules compared to other stablecoins. USD Coin is widely considered to be the safer option because of its transparency. Its management has provided reports since its launch, verifying its reserves.
Who Created USDC?
This kind of fork requires only a majority of the miners upgrading to enforce the new rules. A hard fork is a radical change to the protocol that makes previously invalid blocks/transactions valid, and therefore requires all users to upgrade. For example, if users A and B are disagreeing on whether an incoming transaction is valid, a hard fork could make the transaction valid to users A and B, but not to user C. Senders and receivers typically need bank accounts and specific apps or platforms to transact. The tokenization process ensures there are reserves backing the entire supply of USD Coin. The most important factors for a stablecoin are transparency and trustworthiness — areas where USD Coin does a better job than most of its competitors.
Because it’s always worth $1 and is very safe and secure, at least in cryptocurrency terms, holding USDC in a secure cryptocurrency wallet is the closest thing to a traditional savings account in the crypto markets. It was developed https://www.tokenexus.com/ by Centre, a technology project backed by cryptocurrency exchange Coinbase and Fintech company Circle. Since USDC operates primarily as an ERC-20 token, it is supported by countless DeFi platforms and crypto apps and services.
